Planning for 2024 - The Bus and Motorcoach Operators Blueprint
As North America welcomes the vibrant autumn season, bus and motorcoach operators are in full swing, orchestrating 'fall-foliage' tours, transporting university sports teams across the country, and adjusting scheduled service offerings to align with ever-changing commuter demand patterns.
However, with 2024 right around the corner, companies whose financial year matches the calendar year are not only planning and budgeting but also reflecting.
This article explores two aspects that should be top of mind:
Service Planning
Driver Planning
1 - Service Planning:
Most operators typically fall into one or more of the following categories: Scheduled, Contracted, or Charter, each with its own factors to consider for the upcoming year:
Scheduled Services:
A review of 2023’s passenger count data, revenue per mile, and fare expectations will guide decisions on mileage enhancements, reductions, reallocations, or eliminations.
Take a moment to examine any forthcoming changes in the macro environment. For instance, what is the outlook for fuel prices? Do you anticipate congestion charging to impact your numbers? To what degree?
Constructing a few 'what-if' scenarios, accounting for revenue or passenger counts falling 10, 15, or 25% below expectations, can be instrumental in understanding the potential impact on overall finances. It also provides an opportunity to contemplate the actions that may be necessary to sustain the business should the worst-case scenario materialize.
Your data should also help quantify the points at which you should "cut your losses" in underperforming segments or routes. Failing to define this could extend cash-bleed, and losses may persist longer than anticipated - a phenomenon especially prevalent if the performance of other divisions, or the company overall, is robust.
Contracted Services:
For contracted services, it's an opportune time to reflect on the accuracy of our cost assumptions. Have any unexpected costs surfaced? If so, how can they be mitigated, especially if revenue is fixed?
Are there opportunities available next year to recover any of these unplanned costs? Establishing a documentation process will help ensure that these elements are not overlooked in upcoming opportunities or renewals.
Review the competitive environment. Have there been changes that may enable you to be more conservative in pricing new business opportunities — or necessitate being more aggressive?
Charter/For Hire:
If you enjoyed a successful charter year and anticipate no change in 2024, should you invest in upgrades to sales tech to attract more customers, or would it be more prudent to use the funds to add another vehicle to the fleet? What is the differential value delivered by one option over the other?
Examine fleet allocation. If there's an opportunity to use an asset to generate $4.50 per mile on 365 days of the year (a fictitious Monday to Sunday scheduled service line), or $8 per mile over 150 days (a fictitious 3-day-per-week charter utilization), do you want to reallocate fleet from charter to scheduled, or vice versa? A simple table with calculations may help inform this decision:
2 - Driver Planning:
Prioritize strategic driver planning now to establish a solid foundation before embarking on the next hiring event or advertising campaign.
Estimating Requirements
With insights from the service planning section above, you can estimate our expected weekly driver requirements. While exact schedules may not be defined, approximations can be derived from the expected miles and vehicle requirements.
To arrive at a reliable estimate for driver requirements, utilize a general ratio, such as the current weekly miles to the current weekly number of required drivers. Apply this ratio to your 2024 estimated miles, week by week, to attain a ballpark figure of requirements throughout the year.
Vacation Rostering:
There is a recurrent issue in our industry - too many drivers on vacation during peak periods.
To mitigate this, planning should commence now. Develop a year-long roster for vacation slots, allocating these based on seniority well before January 1.
For instance, if 40 drivers are required from January to March, and 60 from April to December, and each driver is entitled to 20 vacation days a year, this translates to approximately 220 vacation weeks to be rostered throughout the year.
The number of available slots per week should be adapted to the business’s peaks and troughs. If you anticipate a surplus of drivers at certain times of the year, increase the allowable weeks off during those times and decrease them during peak seasons. In the 40-60 drivers example above, aim to align the total weeks allowed in the year with the 220 target.
Early driver planning is pivotal. Without it, operators run the risk of encountering coverage issues, potentially leading to disrupted services, exasperated dispatch staff, and compromised customer service delivery.
Closing Remarks:
Time is of the essence, and it's easy to become 'stuck in the weeds' with planning and find ourselves running out of time to address the aspects of planning that yield the most significant impact.
The primary focus should be placed on service and driver planning, as they not only drive the largest revenue but also account for some of your most substantial costs. Moreover, when these elements are not executed properly, the customer feels the impact acutely.
Avoid burning out by trying to perfect every detail, only to find that there’s insufficient time to give service and driver planning the thoughtful consideration they require. Utilize the aspects highlighted in this guide as a resource in your strategic planning. Good luck!